Hedge funds and private equity funds with assets over $1 billion will be required to provide “extraordinary amounts” of data to the U.S. Securities and Exchange Commission if the final version of the Form PF rule passes on October 26, said SEC chair Mary Schapiro.

That data will include information on fund assets, leverage, investment positions, valuation and trading practices. In addition to the increased oversight, the funds would be subject to routine inspections.

According to Bloomberg, Schapiro told a Managed Funds Association meeting in New York on Thursday the SEC has “high hopes for the Form PF data,” which she said would help the agency and the Financial Stability Oversight Council “understand where the risks are in the financial system.”

The form, required under the Dodd-Frank Act, is intended to help regulators avoid another collapse, like that of the Long Term Capital in 1998, that could threaten to destabilize the financial system.

Schapiro also told the conference the SEC would not consider short-selling restrictions like those to be imposed in the EU.

“I can’t envision the SEC doing another short-selling ban,” she said.

In the wake of recent insider trading investigations and prosecutions, Schapiro said hedge funds should ensure they have “robust compliance policies” in place.

“We’re right in the middle of so many cases and investigations,” Schapiro said, adding that funds should be “extraordinarily careful.”

From the current issue of

MODERN TRADER explores the effect of a potential trade war on U.S. equity markets. Will it end the bull run or will low interest rates allow U.S. equities to maintain its momentum? Read on. We also attempt to identify the key drivers of active equity hedge funds.